
Let me take you back to where it all started. I didn’t grow up with a silver spoon, I didn’t have a rich uncle, and I definitely didn’t win the lottery. What I had was hustle, determination, and just enough understanding of math to realize something powerful: if the return on the money I borrowed was more than what I paid to borrow it, then I could get ahead fast. That’s what we call positive leverage.
Let’s break it down in simple terms, like explaining it to your 10-year-old nephew: if you borrow a dollar at 5% interest and make 10% off it, that 5% difference is working in your favor. That’s your profit after paying the loan.
So here’s how I used that simple idea to build my portfolio from five properties to thirty-two in just a few years, with a plan to hit 50 properties soon.
Step One: House Hacking with Intention
My first five properties? All house hacks. I moved into the properties, lived in one unit, and rented out the others. If the garage could be converted, I did it. If the shed could hold a tenant (legally!), I made it work. I wasn’t just trying to save money on rent—I was laying the foundation to generate equity.
Each of those five properties was a tool, not a trophy. I wasn’t showing off on Instagram; I was stacking bricks, one by one, to build my future. The cash flow was good, sure, but the equity was the real prize.
When those properties appreciated and the rents stabilized, I did what every smart investor should do:
I refinanced them and pulled out equity using positive leverage.
Step Two: Using Equity and BRRRR to Buy 27 More
Here’s the fun part. I took the equity from those first five house hacks and started BRRRR-ing like a machine:
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Buy distressed property (usually off-market)
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Rehab smartly (Tonka thinking: keep it tough, no overdoing)
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Rent it out (always with conservative estimates)
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Refinance using lenders who understood my game plan
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Repeat
And I did. 27 times.
Here’s the trick: I wasn’t using 100% of my own money. The equity from my first five deals became the down payments and rehab funds for the next set of properties. That’s positive leverage in action. I didn’t need to be a millionaire; I just needed to make each dollar hustle for me twice.
With positive leverage, my return on investment stayed higher than my borrowing cost. That spread? That’s what paid the bills and let me grow.
What Is Positive Leverage, Really?
Let’s not get too fancy. Here’s what you need to remember:
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If your loan interest is 6%, and your property is returning 10%, you’re gaining 4% profit on borrowed money.
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This 4% spread, especially when you’re using leverage over many deals, adds up to big wealth over time.
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It’s not just about cash flow. It’s about buying more doors without risking all your capital.
That’s how you go from one house to five. From five to thirty-two. And eventually, to financial freedom.
Warning: Positive Leverage Is NOT a Free Pass
Now don’t get it twisted—this isn’t a “just borrow money and pray” kind of strategy. Positive leverage only works if you:
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Buy right (don’t overpay!)
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Rehab wisely (no gold toilets, folks)
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Manage smartly (bad tenants will kill your margins)
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Refinance with purpose, not just to pull cash and splurge
I’ve seen people get buried in debt because they chased cash-out refis without watching the debt service coverage. That’s negative leverage, and it’ll eat you alive.
How I Plan to Hit 50 Properties
I’m not done. I’m scaling to 50 properties, but I’m doing it the same way I always have:
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Buy properties in up-and-coming neighborhoods.
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Add value through smart, budget-conscious renovations.
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Leverage existing equity to minimize out-of-pocket costs.
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Keep debt payments lower than the cash flow.
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Use every refinance opportunity to buy the next one.
I treat every property like a soldier in my army. If it doesn’t cash flow or build equity, it gets replaced. If it performs, it funds the next.
The secret sauce is discipline. I’m not chasing shiny objects. I’m not trying to impress anyone. I’m focused on the plan: one deal at a time, using positive leverage to make each dollar stretch.
Final Tips If You Want to Do This Too
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Track your leverage like a hawk. Know your cost of capital and expected return before you borrow.
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Use lenders who understand investors. DSCR loans, local credit unions, and private lenders can be way more flexible than big banks.
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Don’t just invest for cash flow. Invest for velocity. Positive leverage lets you multiply your dollars.
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Hold onto your best properties. Sell your worst performers and roll the funds into better ones.
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Remember: Your first 5 deals set the tone. Get those right, and you’ll have the leverage to build an empire.
Written by CEO of Graystone & Companies & Coach of the Property Profit Academy
Let me teach you how at propertyprofitacademy.com
Keep it consistent, stay patient, stay true—if I did it, so can you!
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